Major UK banks are rolling out mortgage products that require little or no deposit, helping first-time buyers who struggle to save for a initial payment.
Lenders relax deposit rules
Metro Bank recently launched a 100% loan-to-value mortgage for eligible first-time buyers. The move follows similar offers from other lenders as affordability pressures increase.
Lloyds Banking Group introduced a product in May requiring a £5,000 deposit—about 2% of the property value. Its five-year fixed rate is set at 5.89%, but the mortgage is limited to properties worth up to £300,000, which may exclude buyers in higher-priced areas like London. The deal is available through Lloyds, Halifax, and mortgage brokers.
Santander provides a 98% loan-to-value mortgage with a five-year fixed rate of 5.49%, allowing loans up to £500,000 with a minimum £10,000 deposit. Skipton Building Society offers 100% financing for properties up to £600,000 at rates starting at 5.55%. Yorkshire Building Society’s 99% loan-to-value mortgage covers properties up to £495,000 at 6.44%.
Alternative structures gain traction
Banks are also expanding joint borrower, sole proprietor (JBSP) arrangements. These allow applicants to include income from relatives or friends without granting them ownership of the property. Doug Miller at Lansdown Financial Services noted that demand for JBSP mortgages has risen sharply as affordability worsens.
Metro Bank’s JBSP product permits borrowing between 95% and 100% of a property’s value but requires an immediate family member as a joint borrower. The five-year fixed rate mortgage allows loans up to £675,000 at 6.99%.
Buyers who can put down 5% will find standard two- and five-year fixed rates starting around 4.95% to 5.05%. Larger deposits of 10% or more provide access to lower rates and more product choices.
The return of these products marks a shift from post-2008 lending practices, when 100% mortgages nearly vanished. David Hollingworth at broker L&C Mortgages said some buyers might still benefit from saving longer to secure better terms, but for renters, low-deposit options could make homeownership more achievable.
These changes show how lenders are responding to the challenges first-time buyers face. The shift carries risks—higher loan-to-value mortgages often come with steeper rates, and borrowers with little equity could struggle if property values fall. However, for those previously locked out by deposit requirements, the new options provide a path that didn’t exist a few years ago.
Experts advise comparing products carefully and consulting a broker before deciding. The market is evolving quickly, and what suits one buyer may not fit another.
Rates remain higher than pre-2022 levels, but competition among lenders is slowly improving terms.
